The association shall determine the percentage of stock to which each insured is entitled as follows:

1. The amount of gain or loss from operations, including an equitable allocation of investment income attributable to operations, is calculated for each of the following groups:

(a) Insureds who have not paid a capital stabilization charge;

(b) Insureds who have paid this charge for a given policy year; and

(c) Insureds who have paid a single charge to cover all policy years of participation in the association.

2. For each calendar year the association has been in operation, the amount of gain or loss from operations, including an equitable allocation of investment income attributable to each group, is divided by the number of insured months in that group.

3. For each group in which an insured participated in any calendar year, the insured’s number of insured months in that group is multiplied by the amount of income per insured month attributable to that group, as determined in subsection 2.

4. For each insured, the results of the calculations performed under subsection 3 for each group in which the insured was a member during a particular calendar year are added.

5. For each insured, the total amount the insured paid in capital stabilization charges is computed.

6. For each insured, the sum of the results of the calculations performed under subsections 4 and 5 are divided by the total surplus of the association as shown in its financial statement for the year preceding its conversion to a domestic stock insurer, to obtain that insured’s percentage of ownership of the total stock to be distributed.

(Added to NRS by 1981, 1022)